Wednesday, October 2, 2013

Boycott is an act of abstaining from buying or using. The definition sounds simple, but it's a word that holds significant connotations. We shape much of our lives around the things we buy and consume. I like to buy and consume whisky. Diageo owns a hell of a lot of whisky. To say "no more Diageo products for me" means there will be a lot less whisky out there for me to purchase. But when I buy something, that money goes to support a person or a series of actions and policies which constitute a business. Thus my money = me. Do I want to support the actions and policies that are Diageo?

The only reason for me to say "yes" is whisky.

Here are some personal motivations for me to say "no":

1. Let's start with the Special Releases' pricing that I mentioned on Monday. Diageo has doubled, tripled, and quadrupled prices on these annual releases over the past few years. And this isn't just on closed distilleries, but also open ones, so they cannot use the "closed distillery" reasoning for the boosts. Consider that while they are priced higher than similar single casks on the market, these Special Releases are not single casks. Instead, ten to twenty casks are utilized for each release thus there are many more bottles for sale. So this action isn't just there to silence the secondary market, but also to manipulate the primary market via pushing prices up and creating increased scarcity for their future "Special Releases". For more information and a better take on this, please see Oliver Klimek's "Whisky for Fools" post.

2. Next, the termination of Johnnie Walker Green Label. There are now two posts about this (here and here) so I won't belabor this point much more. Green Label was one of my favorite Diageo products and possibly their highest quality blend. So there's a personal gripe built into this, in addition the BS PR involved.

But one additional note that I did not include yesterday... For the folks who claim that blended malt sales fell dramatically in 2011 -- triggering the Green Label axe -- it's hard to know how blended malt sales could do well when there was a 55% drop in exported blended malt in 2011. If you give us less, we'll buy less. Otherwise, it looks like companies like Diageo wanted to keep their malt for higher profit-margin lower-malt whiskies. Don't slap us and say we deserved it when we didn't.

3. Talisker.

Talisker? Talisker. Talisker might produce my favorite malt. Or, at least I think it might but I really have no options to explore it further since Diageo hasn't let any casks slip to other bottlers in almost 25 years. But that's a company-wide issue I'll leave for #5.

This year, Diageo raised the price on Talisker 18 year old by 40% without explanation or without limiting the supply, leaving many of us fans to go WTF? It is now priced up there with similarly aged products by a "luxury" brand (Macallan), a "friggin' quackers pricing" brand (Dalmore), and a hand-run small business (Springbank). I can only assume they were trying to pull a Dalmore (whom they now own) by declaring, "This is luxury because the price is high." Anyway, one of my favorite whiskies is now out of my price range. Cheers.

Then there is Talisker Storm. I've already snarked about this one. I'll put sarcasm aside for a moment. I don't mind distilleries releasing young non-age-statement (NAS) whisky onto the market. A lot of folks are doing it now and pricing it at the bottom of the range. Instead, Storm is priced about $20 higher than its classic age-listed older brother, the 10-year-old. So, Diageo, what you're saying is that in order for me to try a younger NAS Talisker full of oak manipulation, I'm supposed to pay more?

In the end, I'm only left with Talisker 10, the first of the 10-year-old single malts to reach the $60 price range.

4. Poor presentation of a high quality product.

First, they strip whisky out of their whisky in order to make it look pretty in cold climes. By chill-filtering the hell out of the malt, they strain out oils that contribute texture as well as taste and smell compounds. Then they add a significant amount of E150a. And by "significant" I mean my last Oban 14 was brown. I don't mean dark amber or rich gold, I mean brown. That is not the color of watered-down filtered whisky that spent fourteen years in refill bourbon oak.

As consenting adults, we know that the alcohol we drink isn't great for our livers. But with proper hydration we can help remove the alcohol from our bloodstream. I don't know how long lab-created caramel colorant takes to exit my body, but I'd rather not introduce it when I'm already socking my liver with delicious whisky. One poison at a time please. I'll choose malt w/o E150a.

5. No indie casks.

And by that I mean at some point around 1998 Diageo decided to end any further distribution of their casks to independent bottlers. There wasn't a whole lot going out to the indies at that point anyway, but the faucet was shut off.

The independent bottlers are very small businesses that in no way compete with a $80B market-cap slug like Diageo. Instead, with their limited resources they bottle unfiltered uncolored (and often cask strength) whiskies that provide anoraks with the opportunity to experience a malt from an alternate angle. They expand the whisky experience.

Diageo puts several hundred thousand casks into bonded warehouses each year. Couldn't they let a handful out every once in a while? Apparently not.

7. Back in the 1820s, a grocer......what was his name?.......um......oh, John Walker, began blending whiskies to sell to his customers in Kilmarnock, Ayreshire, Scotland. Business eventually picked up a bit, you may have heard. Almost two hundred years later, ignoring protests by tens of thousands of locals (you know, actual Scottish people) and efforts by the Scottish government, Diageo closed the Johnnie Walker bottling plant in the home of Walker's Kilmarnock Whisky, delivering a pounding to the local economy.

8. Let's add into this mix the fifteen distilleries proto-Diageo closed and demolished during the last whisky drought. Does Scotland trust a company -- a non-Scottish company with stakes and ownership around the world, paying tens of millions of pounds to its executives and board and more to large stockholders -- to have this much control over its most famous export? What will Diageo choose to do the next time the market lags? Meanwhile, their human distillery jobs were decided to be redundant and their tax receipts go to the UK at large. With Diageo buying their barley from around the world, how Scottish is their Scotch?

9. To throw a little seasoning in there, Distillers Company Limited (DCL, proto-Diageo) distributed Thalidomide, the pharmaceutical drug that caused horrific birth defects in over 10,000 newborn babies around the world. It took over forty years for Diageo to set aside substantial compensation for the surviving mutilated victims.

10. Is that a little too long ago? How about the '80s? As far as corporate ethics goes, there's the share-trading fraud that tripled Guinness's share price, allowing them to takeover DCL, which is pretty neat. Some of the wealthy fraudsters claimed anti-semitism was behind their eventual punishment -- as a Jew, very little disgusts me more than knowingly guilty parties claiming anti-semitism when they are caught (that includes you, Ryan Braun). Former Guinness CEO Ernest Saunders was able to stay out of prison by claiming he had Alzheimer's Disease. A few years later he magically became the only person in history to have been cured of Alzheimer's Disease. A few years after that, with its massive holdings in tow, Guinness merged with Grand Metropolitan, forming Diageo. So there's no Diageo without billions of dollars of fraud.

I'll stop at ten today. Tomorrow, I'll wrap this all up and try to define my next steps...